A landed cost model has three dates that all look like the conversion date, and only one of them is. The invoice date is when the seller billed you. The payment date is when the money left your account. The export date is when the goods left the country of export, and that is the date CBP uses to convert the customs value to dollars. Confuse them and the duty is wrong on every line.
The conversion itself is mechanical. The customs value is the price actually paid or payable for the goods sold for export to the United States, plus five additions: packing, selling commissions, assists, royalties paid as a condition of the sale, and resale proceeds owed back to the seller. That total is converted to dollars at the rate in effect on the export date. International freight and insurance are stripped out, because the US starts from the price of the goods, not the price of getting them here.
CBP publishes the rates it uses, and the broker applies them from the entry date, but the importer's job is to make sure the value being converted is right before the rate touches it. A value that includes freight will be converted at the right rate and still be wrong. A value that misses a royalty will be converted at the right rate and still be wrong. The conversion is the last step in the calculation, and it cannot fix the steps before it.
The practical failure is the invoice in a foreign currency with a freight line buried in it. The broker strips the freight, converts the remainder, and the landed cost model that copied the invoice total now disagrees with the entry summary by exactly the freight amount, converted at a rate that no longer applies. The forgotten line in the landed cost formula is usually this one: the model used the invoice total, and the entry used the converted goods value, and nobody reconciled the two until the margin report came out wrong.
Build the landed cost in the order CBP does. Start with the price paid, add the five additions, strip the freight and insurance, convert at the export-date rate, then apply the duty rate for the line. Each step has its own source: the invoice for the price, the royalty agreement for the royalty, the freight bill for the freight, and the CBP rate for the conversion. When the model and the entry disagree, the disagreement is in one of those steps, and the step is findable.
Keep the rate with the entry. File the conversion rate and its date alongside the entry summary, CBP Form 7501, so the next person who opens the file can see which rate was used and why. The merchandise processing fee is calculated on the same converted value, so a wrong conversion moves the fee too, and the error shows up twice. A landed cost model that cannot show its conversion date is a model that cannot be audited, and an unauditable model is how a small rate error becomes a large margin error across a quarter of shipments.
The date the goods are exported. Customs value is converted to dollars on the export date, not the invoice date and not the payment date.
Five additions: packing, selling commissions, assists, royalties paid as a condition of the sale, and resale proceeds owed back to the seller. International freight and insurance are stripped out.
Usually because the model used the invoice total and the entry used the converted goods value. Freight and insurance are stripped before conversion, so a model that copies the invoice total will be off by exactly the freight amount.
Yes. The fee is calculated on the converted customs value, so a wrong conversion rate moves the fee as well as the duty. Keep the rate and its date filed with the entry summary.